Brain Gear Investments (Pty) Ltd and Others v Buhle Waste (Pty) Ltd and Another

The City of Mbombela Municipality granted conditional consent in June 2018 for a change in control of its water services concessionaire, Silulumanzi (RF) (Pty) Ltd, subject to the appointment of a 28% Mbombela-based BBBEE shareholder through a process overseen by, and in consultation with, the Municipality. Following a selection process administered by Silulumanzi and SA Water Works, Brain Gear Investments (Pty) Ltd was selected as the BBBEE shareholder. On 14 November 2018, the Municipality approved the transfer of shares and confirmed that the conditions had been fulfilled. Buhle Waste (Pty) Ltd, an unsuccessful bidder in the BBBEE selection process, launched a PAJA review to set aside the 14 November 2018 decision, alleging that the Municipality failed to exercise the required oversight, that the process was neither fair nor transparent, and that Brain Gear lacked the requisite experience. The High Court reviewed and set aside the decision, and the appellants appealed to the Supreme Court of Appeal.

The appeal was upheld in part. Paragraphs 118.3 to 118.7 of the High Court’s order were set aside. The remainder of the order reviewing and setting aside the Municipality’s 14 November 2018 decision was upheld, with costs, including the costs of two counsel where employed.

The case affirms that municipal decisions approving changes in control of water services concessionaires constitute administrative action subject to PAJA, even where they arise in a contractual context. It reinforces the duty of municipalities to comply strictly with self-imposed conditions, particularly oversight and consultation requirements linked to BBBEE and public service delivery. The judgment clarifies the distinction between conditional consent and final approval in administrative decision-making.